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The Nonprofit Blog

1 comment - Last on 01/19/2009

Madoff

The name is fitting but there is nothing funny about the wordplay:  Bernie Madoff (made off) with our endowment.  His contemptible game has stripped some of our most distinguished philanthropic leaders of their fortunes and thousands of recipients of their largesse will be deprived of nonprofit services. Hospitals, schools and museums have lost critically important dollars that support vital programs.

Just when we thought things couldn’t get worse for the nonprofit sector, along comes this ponzi of indescribable magnitude.  We cannot blame our stewards of philanthropic dollars for investing with  Madoff.  After all, look at the company they kept - The List So Far.

Early fatalities include three distinguished foundations:  Robert I. Lappin Charitable Foundation , Chais Family Foundation and the JEHT Foundation (Justice, Equality, Human Dignity and Tolerance.)   Surely more will follow. Read more in the NY Times.

Lots of people lost their personal fortunes with Bernie Madoff  but for the philanthropic sector, the tentacles are devastatingly far reaching. 

Have you lost a major donor or a portion of your endowment?  How did you handle it? What advice do you have for our readers?

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I think that one of the consequences of the Madoff debacle will be a renewed cultivation of a more diverse donor base.  There is still plenty of wealth out there, even in this economy, amongst people whose means may be characterized as modest only in contrast to the very largest donors.  One issue that Madoff has brought to the fore has been the reliance of so many organizations on people from a relatively narrow network.  Not for profits need to put more effort into broadening the donor base, which will not only help them to recover from losses of the current scandal, but lay a firmer groundwork for growth in the future. 


1 comment - Last on 02/26/2009

Out of the Box Thinking: Collaboration & Merger

The scarcity of government funding; competition for foundation grants; uncertainty of corporate giving; concern about individual donations; and an unprecedented demand for social services and programs, indicate that it is time for some out of the box thinking.

The recession has set the stage for nonprofits to seriously consider collaborations for greater efficiencies.  I would even make the case to consider collaborating with organizations that provide different services but could share administrative functions such as HR and bookkeeping.  Surely there are some colleagues out there with whom you could brainstorm, experiment and  build new ideas with more efficient methods to serve your community. 

And, if the dating goes well, there might just be a merger in the offing.  Banks do it, automobile companies do it, law firms do it, airlines do it.  All too often in the nonprofit world, mergers occur when one organization is at death’s door (often due to lack of a transition/succession plan…and increasingly due to lack of money.)  That would be a take-over.  I’m talking about two strong organizations working strategically to build something greater together than they could ever manage separately.  Think about it.

Are any of our readers already involved in, or considering a collaboration or merger?  Can you offer some advice?

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Check out this important article just published by The Bridgespan Group: 

Nonprofit Mergers and Acquisitions: More Than a Tool for Tough Times


Transition - Succession

The baby boomers are retiring in record numbers.  Studies indicate that 50% - 70% of nonprofit executive directors will retire by 2010.  90% of organizations do not have a succession plan. Do you have a strategy for a planned or emergency transition period or a succession of executive leadership?

Whose job is it is to take this seriously? 

Of course the board is the steward of the nonprofit organization and should take it upon itself to create a plan for its sustainability.  However, to be successful, the impetus for creating such a plan must come from the executive director him/herself.  If you truly take pride in that which you have accomplished, it should be important to you, as the exective director, to know that your work will carry on after your tenure. 

I guarantee your organization will experience a sense of renewal and a growth spurt as you consider a plan for transition and executive succession.

What do you see as advantages or impediments to putting such a plan in place?

 

 

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1 comment - Last on 01/19/2009

Madoff

 Read more...
 

1 comment - Last on 02/26/2009

Out of the Box Thinking: Collaboration & Merger

 Read more...
 

Transition - Succession

 Read more...
 


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